During The viceregal era, Gracias was very important for the Spanish and had some years of growth, before being eclipsed by the cities of Antigua Guatemala and Comayagua.

This audience was in charge of applying the laws emanating from Spain and representing the rights of the Crown in the face of land claims, encomiendas and taxes, as well as administering justice in various instances and fulfilling another varied range of duties.

In 1959 there was a rebellion between the commanders of the Third Military Zone of Honduras that included the departments of Copán, Lempira, Ocotepeque and Santa Bárbara.

The headquarters was in the city of Santa Rosa de Copán, but rebel officers transferred it to Gracias and took Fort San Cristóbal as a defensive bastion.

After a short fight, two soldiers lost their lives and the rebellion was unsuccessful, recovering tranquility and Colonel Armando Flores Carías was appointed as the new commander.

The city is one of the most visited tourist sites by Hondurans and has experienced an improvement in infrastructure since the beginning of the last decade, such as the restoration of its historic buildings such as the Iglesia de la Merced among others dating from the colonial period.

The city has several banking agencies, restaurants, markets, the Doctor Juan Manuel Gálvez Hospital, university centers, secondary, primary and university schools, call centers, radio stations, local UHF television stations and clabe and various handicraft stores.

This tourism is based on the town's historic and natural attractions including colonial churches, Celaque Mountain and hot springs.